Portland General Electric

Portland General Electric (PGE) is an electrical utility, formerly owned by the Houston-based Enron Corporation (but now independent), that distributes electricity to customers in parts of Portland, Oregon, as well as parts of Multnomah, Clackamas, Marion, Yamhill, Washington, and Polk counties - covering more than 4,000 square miles and serving more than 1.5 million people in Oregon. (The rest of the City of Portland is served by Pacific Power.) PGE is the main subsidiary of Portland General Corporation. The company's other large subsidiary, Portland General Holdings, provides financial flexibility for nonutility businesses involved in wholesale electric power marketing, independent power production, real estate development, leasing, and world trade services.

Although PGE receives most of its electricity from the Bonneville Power Administration, it also produces its own power from a series of hydroelectric sites at dams on the Sandy, Clackamas, Willamette and Deschutes rivers, as well as a number of fossil fuel plants, including Boardman Plant and Colstrip Steam Plant. Between 1976 and 1993, PGE operated Trojan, the only nuclear power plant in Oregon.

History
The utility was founded in 1888 by Parker F. Morey and Edward L. Eastham as Willamette Falls Electric Co. This corporation installed a hydroelectric generator at Willamette Falls to provide electricity to Portland. In the process, this corporation completed the first long-distance transmission line in the United States on June 3 of that year. Willamette Falls Electric changed its name several times before settling on Portland Electric Power in 1932. Portland Electric Power was reorganized as PGE in 1948.

Ballot measures have been filed by activists several times since the 1960s to convert some or all of PGE into a Public Utility District (PUD), the latest of which was in 2003, and most have been unsuccessful. An exception was in 1999, when PGE announced it was selling its customer base in St. Helens, Scappoose, and Columbia City to West Oregon Electric PUD for $7.9 million. The terms of this sale would leave the physical assets of the distribution system -- the poles, wires and other components -- owned by Enron, who would then manage this system as a contractor exempt from state regulation. Voter distrust of both Enron and PGE was severe enough for them to approve the measure, despite $71,592 being spent in advertisements to oppose it, in comparison to the $2,304 spent by supporters. This resulted with those three cities becoming part of the Columbia River PUD on terms far more favorable to the customers; electricity rates immediately dropped in these cities, and remain lower than those for current PGE customers.

On July 1, 1997, Enron Corporation bought PGE for $2 billion in stock and $1.1 billion in assumed debt. Then in 1999, and again in 2001, Enron attempted to sell PGE to other investor-owned utilities including Portland based NW Natural. The corporate officers of PGE have claimed that this utility was not involved in the financial misdealings of its owner, pointing to the fact that many of its employees suffered when Enron froze the 401(k) retirement plan and were unable to sell the rapidly declining stock. However, Ken Harrison and Joseph Hirko, PGE's CEO and CFO respectively at the time of the Enron merger were charged on several felony level counts primarily related to financial misrepresentation regarding Enron Broadband Services which had its headquarters within the World Trade Center complex that comprises PGE's corporate offices. In addition Tim Belden, head of the West Coast Trading Desk and John Forney, an energy trader who invented various electricity trading strategies such as the Death Star, operated from the trading floor in the PGE corporate offices and were also convicted of financial crimes related to the California Electricity Crisis.

Existing Coal Plants
PGE partly owns the following plants:

PPL Montana, LLC operates Colstrip 3 & 4; PGE has a 20 percent ownership interest.

Citizen activism
The Boardman plant has increasingly come under scrutiny from Oregonians and local environmental groups. In September, 2009, PGE held a public meeting in Portland to discuss a proposed high-capacity transmission line. However, the bulk of the public input centered around the future status of the Boardman coal plant. Critics questioned whether or not a proposed $560 million investment in the plant for pollution control measures was too risky given the possibility of a future plant closure.

Oregonians have also questioned PGE's proposed plans to build two new natural gas power plants by 2015 and keep its controversial Boardman coal-fired power plant burning for three more decades, an energy strategy that falls well short of the state's 2020 goals for cutting carbon emissions to combat global warming.

Prior to the meeting, on September 23, 2009, a coalition of environmental and ratepayer advocates sent a letter to PGE urging the company to evaluate shutting the plant down by 2020 rather than investing in pollution control upgrades.

Boardman to close by 2020
On January 14, 2010 it was announced that Portland General Electric will be closing its Boardman Plant twenty years ahead of schedule. The plant will close in 2020 instead of 2040. Oregon Public Utility agreed to the plan in November 2010. PGE was originally set to invest more than a half billion dollars in pollution controls (scrubbers) by 2017 to comply with EPA and state clean air regulations, then keep it running until 2040.

Instead, the company wants regulators to allow it to make a $45 million investment by 2011 to partially clean up its emissions of mercury and oxides of nitrogen, then operate the plant until 2020. The Oregon Sierra Club and Friends of the Columbia Gorge argue, that while a 2020 close date is better than a 2040 closure, it is still more economical for the plant to shut its doors in 2014.

On February 1, 2010 it was announced that PGE was considering using biomass to continue operating the plant after it ends its use of coal in the future. PGE is said to be considering if it can replace all of the millions of tons of coal it burns every year at Boardman with plant based material that has been pre-treated through a process called torrefaction. While still in experimental phases, torrefaction produces a substance similar to coal, and is also energy intensive to produce. Critics on the other hand cite that no commercial size torrefaction facilities exist and it is still not clear how much carbon will be used in the process of torrefaction.

PGE released its plans to close Boardman on April 9, 2010. The company filed an amendment to its energy resource plan in which it asked state utility regulators to approve the closure of the plant by 2020. Ratepayer and environmental advocates are attempting to work with PGE in an attempt to close the plant earlier.

Proposal to close plant rejected
On June 16, 2010 the Oregon Environmental Quality Commission turned down PGE's proposal to close Boardman by 2020. PGE stated that they would go back to the drawing board to look for other ways to close the plant by 2020. The Commission stated that it was not attempting to halt an early shutdown of the plant, but only wanted to do so using the best options possible. PGE is to release a new plan by the end of summer 2010 at which point the Commission will once again review their proposal.

The Sierra Club, however, stated that the rejection by the Oregon Department of Environmental Quality (DEQ) was not necessarily a hold up for Boardman's closure. In a Press Release the Club stated, “The Sierra Club supports the Department of Environmental Quality’s recent recommendation to deny Portland General Electric’s petition to subvert pollution controls for PGE’s Boardman coal-fired power plant." The Sierra Club believes that the DEQ recognizes the need to end Boardman's use of coal by an earlier date than 2020.

New proposal for Boardman closure announced by Oregon DEQ
On June 28, 2010 the Oregon Department of Environmental Quality laid out three alternative options for shutting down its Boardman coal-fired power plant, all of which involved an earlier closure date or significantly more expensive pollution controls. PGE stated that they did not like any of the options.

As reported in The Oregonian on June 28, 2010:


 * The Department of Environmental Quality offered three alternative Monday. The cheapest sticks with the same controls in PGE's 2020 proposal, but requires the utility to shut the plant in 2015 or 2016.


 * A second option goes with PGE's 2020 shutdown date, but requires the utility to install $320 million worth of new burners and scrubbers by 2014. That option avoids a third set of controls, called selective catalytic reduction, to be installed in 2017, but is $280 million more expensive than PGE's existing 2020 plan.


 * The final option splits the difference, shutting the plant in 2018 and requiring PGE to spend $100 million by 2014 on new burners and an injection system to reduce sulfur dioxide emissions.

In August of 2010, PGE announced that it believed its proposed 2020 shutdown of Boardman made the most fiscal sense for the company. The utility filed an Integrated Resource Plan with the Oregon Public Utility Commission stating that the 2020 shutdown was its preferred option. Such an option would cost the utility $320 million for new emissions controls, which would be paid for in part by PGE customers through a predicted 2.4 percent rate increase. The company also stated that an earlier closure was not an option because it would not give the utility enough lead time to develop a replacement for Boardman.

PGE tests biomass for Boardman
It was announced that in September 2010 PGE teamed with researchers from Washington and Oregon to study how a fast-growing grass known as Arundo Donax could serve as fuel for the utility’s controversial coal-fired power plant in Boardman, if the plant ended up being converted to biomass. Critics believe that the grass would require water that could more effectively be used for growing food crops.

PGE stated that converting the Boardman plant to torrified biomass would cost between $350 and $450 million, in addition to the $200 million for pollution controls. The company also stated that the utility would need between 75,000 to 114,000 acres to grow Arundo Donax in the Boardman area.

In November 2010 PGE announced it was considering "giant reed grass" to replace coal at its Boardman facility. The company stated that it seeked to plant up to 300 acres of giant reed in Morrow and Umatilla counties in Oregon to see if it’s a viable biomass crop for its power plant near Boardman.

DEQ Hearings
In September 2010, the Oregon Department of Environmental Quality (DEQ) held hearings around the state to collect testimony on five possible options Portland General Electric (PGE) has been offered. The Oregon DEQ will review testimony in October and November, and anticipates presenting their recommendation to the Environmental Quality Commission in December.

EPA Criticizes Boardman for polluting since 1998
In October 2010 the Environmental Protection Agency stated that PGE's Boardman plant in Eastern Oregon has been polluting since in 1998. The EPA's "notice of violation," said improvements PGE made to Boardman in 1998 and 2004 boosted pollution and should have triggered expensive pollution controls for sulfur dioxide, a contributor to acid rain. EPA's notice also threatened civil penalties of up to $37,500 for each day the plant operated without pollution controls. However, the EPA also asked PGE to enter into discussions to resolve the matter.

PGE seeks to eliminate 2040 option
In October 2010 stated that the company was seeking to eliminate its "safety net" option of 2040 as a potential closure date for the Boardman coal plant. The request was part of an agreement reached between PGE and a collection of environmental organizations, including Oregon Environmental Council, Renewable Northwest Project, the Citizens Utility Board and the Northwest Energy Coalition.

The agreement also included assurances that PGE would work with the groups to consider non-fossil fuel-based replacement energy sources when Boardman closes.

"We think it's really important to close the plant early and think about this transition to lower carbon replacement power," said Jana Gastellum, climate change program director at the Oregon Environmental Council.

State Agencies Endorse PGE's 2020 Boardman closure date
On November 19, 2010 Oregon Public Utility endorsed PGE's plan to close its Boardman coal plant by 2020. PGE however has not decided whether it will shut the 585-megawatt plant or convert it to another fuel, most likely biomass.

"This plan responsibly addresses the future energy needs ofour customers and strikes a sensible balance between customer costs and risks and environmental impacts and sustainability," Jim Piro, PGE president and CEO, said in a press release.

While the 2020 agreement was endorsed by the Oregon Environmental Council, Renewable Northwest Project, Citizens’ Utility Board and the Northwest Energy Coalition the Sierra Club stated that PGE could and should shut down its Boardman facility by 2015. The Sierra Club previously sued PGE over Boardman emissions.

On December 3, 2010 the Oregon Department of Environmental Quality issued its final staff recommendation about the future of the Boardman coal-fired power plant, embracing the 2020 closure date.

Attempted acquisition from Enron
Concerned by uncertainty that the Enron bankruptcy would bring, several local governments began investigation of acquiring PGE by condemnation. These studies were ended following the announcement on November 17, 2003 that a group called Oregon Electric Utility, led by former governor Neil Goldschmidt and backed by Texas Pacific Group, offered to buy PGE for $2.35 billion.

Many local groups voiced their suspicion that Oregon Electric Utility would be run to maximize profits short-term, rather than to the customers' benefits. These groups included Industrial Customers of Northwest Utilities, Associated Oregon Industries, the Citizen Utilities Board, as well as the majority of cities and local governments in PGE's service area. This purchase offer was denied by the Oregon Public Utilities Commission, a three-member regulatory board, on March 10, 2005. Discomfort over the Texas Pacific purchase led to a number of voter initiatives to convert parts of PGE into PUDs. PGE has so far defeated measures in Multnomah County (November 14, 2003), Yamhill County (March, 2004), and Clackamas County (May 18, 2004).

With the rejection of the Texas Pacific Group's offer, the City of Portland announced it contacted Enron to resume negotiating an offer to purchase PGE. On April 19, 2005, Portland city officials announced that they were willing to spend 7.5 million in attorneys' fees to purchase the utility. On July 6, the City Council unanimously adopted a measure to finance the acquisition of PGE by the sale of $3 billion in bonds. Enron called off negotiations over acquisition of PGE on July 20, 2005. The same day, Governor Ted Kulongoski vetoed a bill that would create a public corporation to purchase PGE.

Independence from Enron
On May 3, 2006, the company declared its independence from Enron, becoming a private company. PGE has since distributed its shares on the New York Stock Exchange and become a locally-based utility.

Contact Information
Portland General Electric Company 121 SW Salmon St. Portland, OR 97201 Phone: (503) 464-2511 Website: http://www.portlandgeneral.com

Citizen groups

 * Columbia Riverkeeper
 * Sierra Club Oregon Chapter

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